The study determines affordability by comparing a city’s median income with its median home price. Historically, Western cities have had a housing-to-income ratio of around three, the study says, meaning the median house price is typically three times the median annual household income.

In Vancouver in 2011, that ratio hit 10.6; the median house cost 10.6 times the median income. Only Hong Kong was less affordable, with a ratio of 12.6.

This is not to say that Vancouver is the second-most expensive city to buy a house in the world. The study measures affordability according to earnings in each city. New York City, for example, is more expensive in real terms than Vancouver, but because incomes are higher in the Big Apple, the city ranks as more affordable. (New York City ranked 10th in the survey.)

Of the 35 metro areas in Canada that were part of the survey, all six of the largest -- Toronto, Montreal, Vancouver, Ottawa, Calgary and Edmonton -- were listed as “severely unaffordable,” meaning a ratio of more than five.

Toronto’s ratio was 5.5, and the study notes “a deterioration of 40 per cent in housing affordability since 2004.”

Montreal, which according to the study has been “one of the worst performers in housing affordability,” has seen its affordability erode by 60 per cent since 2004, the study said.

The federal government has taken steps in recent years to cool the housing market by increasing the entry barriers to buying a home. Ottawa twice reduced the maximum amortization period for a mortgage insured by the Canada Mortgage and Housing Corporation, to 35 years in 2008 and then again to 30 years in 2010.

According to recent reports, the Harper government continues to be worried about an overheating housing market, and is prepared to tighten mortgage rules again if further evidence surfaces of an overheating market. New rules could include tighter regulations for how mortgage-seekers report income, as well as new, tougher rules on how to measure affordability for condo buyers, the Financial Post reported.

THE 10 LEAST AFFORDABLE CITIES FOR HOUSING

The number shown is the housing affordability ratio -- a measure that shows how much a median home costs relative to median incomes in a given city. Historically, a typical ratio has been around three.

Close



Least Affordable Cities For Housing

of





The number shown is the housing affordability ratio -- a measure that shows how much a median home costs relative to median incomes in a given city. Historically, a typical ratio has been around three.
Source: Demographia, 8th Annual International Housing Affordability Survey

This four-bedroom, two-bathroom custom-built bungalow in St. John's West End neighbourhood boasts hardwood floors, a covered sundeck and an oversized yard. With an asking price of $349,900 and 2,750 square feet of livable space, this spacious home costs approximately $125 per square foot.

This five-bedroom, two-and-a-half bathroom house features a double-width garage and a heated inground pool. At approximately 2,750 square feet and an asking price of $349,900, it works out to around $127 per square foot.

This spacious split-level home in southeast Winnipeg features four bedrooms and three baths, a stone fireplace and a jazuzzi in the master bedroom. It sits on a 142-foot-long, pie-shaped lot. At 2,182 square feet and a $349,900 asking price, it works out to around $160 per square foot.
CORRECTION: An earlier version of this slide incorrectly listed the price-per-square foot as $600.

This five-bedroom, three-bath home features vaulted ceilings, a fireplace and a massive walk-in closet in the master bedroom. At 1,408 square feet -- this average-sized house on the prairie works out to $248 per square foot.

This two-story townhouse condo just east of downtown Montreal features three bedrooms and two baths, cherry wood floors and a terrace. At 1,400 square feet and an asking price of $349,000, this condo works out to $250 per square foot.

This cozy bungalow on the edges of the Greater Toronto Area features four bedrooms, two baths and a long, 175-foot lot. Highlights include a granite countertop and newly finished hardwood floors. At a snug 900 square feet, this house is going for $388 per square foot.

This one-bedroom, one-bath condo in Toronto's Entertainment District features a balcony with a southeast exposure. In a sure sign the condo is outfitted with just the basics, the unit's sellers boast of its "brand name appliances" and "frost free refrigerator." At 700 square feet (including the balcony), it works out to $499 per square foot.

This one-bedroom, one-bathroom corner unit in Vancouver's Kitsilano neighbourhood "shows much larger than the square footage," the realtor boasts. That's good, because at 508 square feet, this place is only slightly larger than some of the bedrooms and living rooms available in similarly-priced houses in other markets. The condo boasts "gorgeous mountain views," but it'll cost you -- $688 per square foot.